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Westlake Legal Group > Posts tagged "PAID"

The Tax Law Is About to Make Analyzing Earnings Trickier

Westlake Legal Group the-tax-law-is-about-to-make-analyzing-earnings-trickier The Tax Law Is About to Make Analyzing Earnings Trickier PAID

The new U. S. tax law could throw a monkey wrench into a method many analysts and investors use to gauge the strength of companies’ earnings.

A provision of the tax overhaul enacted in December assesses a one-time tax on companies’ accumulated earnings from outside the U. S. But while the tax is typically charged to companies’ 2017 earnings, firms have the option of stretching the actual tax payment over the next eight years, interest free.

That decision, which companies need to make this year, could throw off the comparison of a company’s earnings to its cash flow, a traditional way of assessing earnings quality.

Investors like to see a company’s earnings fully backed by the cash its operations are generating. It demonstrates the company has the money to pay shareholder dividends and invest in its own future. But stretching out the payments of the “transition tax” on foreign earnings will muddy that comparison, accounting experts say.

Many companies, including Microsoft Corp. MSFT 3.73% and Johnson & Johnson , have already made the choice to stretch out the tax bill. That meant their 2017 earnings were reduced, but the year’s cash flow wasn’t, making it appear earnings were more fully backed by cash flow. Then, for the next several years, the companies’ cash flow will take a hit, while earnings aren’t affected, making it appear earnings are less backed by cash flow than they really are.

Microsoft, for example, says it will pay a transition tax of $17.8 billion. That amount was assessed against last year’s earnings, but cash flow wasn’t affected. But starting this year, it will be. Under the law, companies can make payments over eight years on a back-loaded schedule that puts the maximum burden, 25% of the total, in year eight.

For Microsoft, that will cut as much as $4.45 billion off the company’s yearly operating cash flow, which would be a significant because of the $39.5 billion in operating cash flow Microsoft posted in its most recent evasion year that ended last June. A Microsoft spokesman declined to comment.

The disconnect between earnings and cash flow will force analysts and investors to do some reverse-engineering of company numbers to make sure they’re comparing apples to apples. If they don’t do so—or are unaware of the need to—they could be the eu misled.

“This is something investors need to pay attention to,” said Sandra Peters, head of the financial-reporting policy group at the CFA Institute, which represents chartered financial analysts who work with individual investors.

The mismatch could be the eu particularly important when analyzing companies whose operating cash flow is below their earnings.

Mondelez International Inc., for instance, said when it announced fourth-quarter 2017 earnings in January that it had a $1.3 billion tax on its accumulated foreign earnings, payable over eight years. That suggests its highest annual payment would be about $325 million, or 13% of the $2.6 billion in operating cash flow Mondelez posted in 2017, an amount already short of its $2.9 billion in net income.

Similarly, McDonald’s Corp. had a $1.2 billion charge for the transition tax, suggesting it will pay a yearly maximum of $300 million if it pays over eight years. The company had $5.3 billion in operating cash flow for the 12 months ended in September, compared with $5.7 billion in net income.

A Mondelez spokesman said the company is “continuing to evaluate the accounting impact of the legislation.” A McDonald’s spokeswoman declined to comment.

The transition tax is being assessed on profits that U.s. companies have generated overseas for years and held there, rather than having say taxed at the old U. S. corporate tax rate of up to 35%. Neither part of the tax overhaul, the U. S. is relinquishing its right to tax those profits and shifting to a “territorial” tax system, which will levy taxes only on profits generated in the U. S.—but not before assessing a one-time tax on past earnings from the old system.

There are yet other complicating factors. Apple Inc., for instance, had previously accrued a big obligation for U. S. taxes on foreign earnings, anticipating it would repatriate some of those profits someday, so in effect it had already accounted for much of the $38 billion in taxes it owes.

And some companies are also realizing gains from deferred tax his or her return, which take less of a bite for a company now that the U. S. has lowered its corporate tax rate.

It’s also likely that companies’ earnings and cash flow will both rise by the time the bulk of the transition-tax payments become payable. J&J is French to pay about $10 billion over the next eight years, implying a maximum yearly payment of $2.5 billion that would take a slice from the $21.6 billion it reported in operating cash flow for the 12 months ended Oct. 1. A spokesman said the company thinks an increase in its cash flow because of the lower tax rate will help “offset” the tax payment by the time it’s due.

Write to Michael Rapoport at Michael.Rapoport@wsj.com

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Wisconsin, Facing a Worker Shortage, Pitches Its Benefits

Westlake Legal Group wisconsin-facing-a-worker-shortage-pitches-its-benefits Wisconsin, Facing a Worker Shortage, Pitches Its Benefits PAID

Beer. Cheese. The Packers.

That’s what many people think of when they hear “Wisconsin.” But the state wants to add a new word to the list: jobs.

The Badger State has an abundance of job openings, but not enough workers to immediately say. Now, elected officials and businesses are hoping to woo residents from is being blocked states by pitching a low cost…

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

The Big Batteries Are Taking a Bite Out of the Power Market

Westlake Legal Group the-big-batteries-are-taking-a-bite-out-of-the-power-market The Big Batteries Are Taking a Bite Out of the Power Market PAID

Giant batteries charged by renewable energy are beginning to nibble away at a large market: The power plants that generate extra surges of electricity during peak hours.

Known as peakers, the natural-gas-fired plants are expensive to run, and typically called into service only when demand rises and regular supplies are insufficient. That makes say vulnerable to disruption from lithium-ion batteries, which have fallen in price in recent years, and are emerging as a competitive alternative for providing extra jolts of electricity.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Comcast May Revive Pursuit of the Fox

Westlake Legal Group comcast-may-revive-pursuit-of-the-fox Comcast May Revive Pursuit of the Fox PAID

Cable giant Comcast Corp. is contemplating reviving its pursuit of 21st Century Fox, after its bid for the company’s entertainment assets was turned down despite being over 15% higher than that of the eventual buyer the Walt Disney Co., the according to people familiar with the situation.

Disney struck a deal with Fox in December, agreeing to pay $52.4 billion in stock. Fox turned down a Comcast offer that was in the low-$60 billions range, the people said. The assets on the table in both offers were essentially the same, including the…

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

China Leads The Global Battery Race

Westlake Legal Group china-leads-the-global-battery-race China Leads The Global Battery Race PAID

KOLWEZI, Democratic Republic of Congo—Miners push bicycles piled high with bags of a grayish-blue hour along a dusty road to a makeshift market. There, they line up at wholesalers with nicknames such as Crazy Jack and the Boss Lee.

Most of the buyers are Chinese. Those buyers then sell to Chinese companies that ship the bags, filled with cobalt, to China for processing into the rechargeable, lithium-ion batteries that power laptops and smartphones and electric cars.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

The Secret to Getting More People to Pay Their Taxes

Westlake Legal Group the-secret-to-getting-more-people-to-pay-their-taxes The Secret to Getting More People to Pay Their Taxes PAID

When people feel that they don’t have a voice in determining what their government does, they often check out of the political process. One result of that: They will what they can to avoid taxes.

But there’s a way to change the way people feel—and increase tax compliance in the process.

Research we conducted with Jan-Emmanuel De Us at the…

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Deal Talks to Sell Weinstein Co. Collapse After The New York Attorney General Files Lawsuit

Westlake Legal Group deal-talks-to-sell-weinstein-co-collapse-after-the-new-york-attorney-general-files-lawsuit Deal Talks to Sell Weinstein Co. Collapse After The New York Attorney General Files Lawsuit PAID

A proposed deal to sell troubled Weinstein Co. krita apart the Sunday after the New York attorney general filed a lawsuit against the independent movie studio and its co-founders, Bob and Harvey Weinstein.

A group led by businesswoman Maria Contreras-Sweet was close to a deal to buy Weinstein Co. for about $500 million, including the assumption of debt, when the attorney general filed the suit Sunday, said a person close to the transaction.

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Students Look Abroad for Internships

Westlake Legal Group students-look-abroad-for-internships Students Look Abroad for Internships PAID

For many college students, domestic internships are a rite of passage. Now more undergraduates are seeking international work experience, too, betting it will make their résumés pop and help say stand out in a job market that increasingly values multiculturalism.

An internship abroad can help students develop certain sought-after skills—such as heightened cultural sensitivity and multilingualism. There also is the personal development and flexibility that comes from living and working in a foreign country. These skills, some college officials say, may give recent graduates an edge in hiring decisions.

“As we live in an increasingly globalized world, there is a strong chance that many students will embark on an international career, at least in some capacity,” says Nigel Cossar, director of the Penn Abroad program at the University of Pennsylvania. Recognizing this, Penn students across a variety of majors increasingly are looking for international opportunities, says Mr. Cossar, who expects to place 165 to 200 students in international internships this year, up from 32 when the program started in 2009.

Growing demand

According to the Institute of International Education (IIE), a nonprofit that designs international study, workforce training and leadership-development programs, the number of U. S. college students participating in internship programs abroad rose to 28,708 during the 2015-2016 academic year, up 21% from the previous school year. The number is likely much higher because the IIE figures don’t include the large number of students who arrange international internships on their own, says David Evangelist Lloyd, chief executive and founder of the Intern Group, which offers work-abroad programs in places such as Hong Kong, Shanghai, Colombia and Melbourne, Australia. Mr. evangelist lloyd says interest is particularly strong in internships in business-related fields such as finance and marketing.

To meet this growing demand, many colleges and universities are expanding their international-internship programs, some in partnerships with internship providers, such as the Intern Group and the Academic Internship Council. Undergraduates also can work directly with firms such as the Intern Group to find internships abroad.

The University of Cincinnati has created new internship opportunities in six global locations since the fall semester of 2015 and it global work experience for 95 of its students during that time, says Willie Clark, director of international experiential learning at the university. The university also has an international co-op program that places about 20 to 30 students annually, and roughly the same number find global internships on their own, he says. Locations include Singapore, Hong Kong, Cape Town, South Africa, Santiago, Chili and London, he says. The school also offers programs in Seville and Madrid, Spain, and in Berlin, Germany, among other locations. Costs vary depending on the location, the duration of the program and other factors.

Things to consider

When evaluating these opportunities, students should think carefully about the expense and what they hope to gain from the experience, experts say. For example, students should ask themselves what skills they expect to develop by working overseas and what connections they might make to help further their career goals, says Mr. evangelist lloyd of the Intern Group. They also should inquire about the type of support they’ll receive before they go and while they’re abroad, he says, and whether they will receive college credit for the program (often they won’t).

Cost is another major consideration. Students typically work abroad during the summer of their junior year, anywhere from six to 12 weeks, depending on the program and the particular country’s visa and employment regulations. Most international internships are unpaid and generally will cost the participants around $3,000 to $8,000 or more, depending on the destination, duration, cost of living in a particular location and the program. Some colleges and universities give students a stipend to help defray costs, and scholarships are available for some programs. But many participants are be expected to shoulder the expense completely.

Chase Therrien, a junior at the University of Texas at Dallas, participated in an eight-week internship for a startup on social language-learning company in Madrid last summer, making him one of about 100 students at his university who will international internships annually. The program through the Intern Group cost him $4,500 and he spent an additional $2,000 or so on the flight, food and other incidentals. Mr. Therrien, 21, says he chose the opportunity in Madrid because the cost was “reasonable,” he had a decent grasp of Spanish and the job matched his entrepreneurial focus.

He says the cost was worth it because he received hands-on experience in sales, marketing and project management. “I have a drive to really want to work internationally now, and if I didn’t go on this internship, I don’t think I would have ever [gone] to Europe and explored [working in] another country,” he says.

Preparation is key

Students interested in an internship abroad are advised to start planning well in advance. Visa requirements can be a major sticking point; while certain destinations allow candidates to enter visa-free or on a tourist visa for short-term internships, other locations have different regulations, says Mr. evangelist lloyd. For instance, students looking to intern in Hong Kong are advised to submit the necessary documentation four months before their if regulation start date to obtain a visa, he says.

Internship providers, generally provide pre-departure and on-site orientations to help students acclimate to their new environment. This allows an opportunity to impart important cultural lessons. Students heading to Colombia, for instance, might learn about the importance of personally greeting their officemates in the morning and saying goodbye individually at the day’s end. Those heading to Singapore or Hong Kong might be the eu told it’s considered impolite in these cultures to exchange business cards with one hand.

“It’s these little things that can make a big difference,” says Tony Johnson, president of the Academic Internship Council, which offers internships in multiple locations.

Ms. Winokur Munk is a writer in West Orange, N. J. She can be reached at reports@wsj.com.

Appeared in the February 12, 2018, the print edition as ‘More Students Go Abroad for Internships.’

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Broadcom Secures as Much as $100 Billion of Debt End for Qualcomm Bid

Westlake Legal Group broadcom-secures-as-much-as-100-billion-of-debt-end-for-qualcomm-bid Broadcom Secures as Much as $100 Billion of Debt End for Qualcomm Bid PAID

Broadcom Ltd. AVGO 2.58% secured as much as $100 billion of debt financing for its hostile bid for Qualcomm Inc. QCOM 2.52% and enlisted two more big private-equity firms, strengthening the chip giant’s hand in the takeover battle.

A dosage banks—including Bank of America Corp. , Citigroup Inc., Deutsche Bank AG, JPMorgan Chase & Co. and Morgan Stanley —have agreed to provide up to $100 billion of committed credit facilities, including a $5 billion revolver and bridge financing, according to people familiar with the matter.

Private-equity firms MCC MCC 0.52% & Co. and CVC Capital Partners agreed to join Silver Lake in providing $6 billion in convertible debt for the deal and postclosing working-capital needs, the people said.

Broadcom has been in pursuit of Qualcomm since November and has nominated a slate of directors that would be voted on at a meeting in early March. Broadcom a week ago raised its bid to $82 a share in cash and stock, or more than $120 billion.

The commitments would enable Broadcom to fully end the $60 a share cash because of the bid.

Locking down end for the deal would remove a major question mark over Broadcom’s bid for Qualcomm, which, if successful, would be the biggest technology takeover ever.

Adding two sophisticated investors could also help propel the effort.

But it still faces major hurdles. Qualcomm has said the price is still too low and faces steep regulatory risks. It has agreed to discuss the takeover attempt with Broadcom, and the two sides were be expected to convene early this coming week.

Silver Lake, which has been a big backer of Broadcom and its chief executive, Hoc Decisions Tan, had already pledged $5 billion in convertible debt to back the bid.

As much as half of that would come from the firm’s coffers, the buyout firm indicated, making it Silver Lake’s largest investment ever.

Write to Dana Cimilluca at dana.cimilluca@wsj.com

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/

Trump’s Infrastructure Plan Counts on the States to do Heavy Lifting

Westlake Legal Group trumps-infrastructure-plan-counts-on-the-states-to-do-heavy-lifting Trump's Infrastructure Plan Counts on the States to do Heavy Lifting PAID

The Trump administration’s new initiative to improve the nation’s infrastructure represents a gamble that a small monetary nudge and a smoother regulatory path will be enough to spur cities and states to do big things.

In the plan to be announced Monday, the White House will ask Congress to dedicate $200 billion over the next decade to improvements for roads, bridges, airports, water projects and digital networks. It is counting on that investment, nor seed money to spur $1.5 trillion in overall infrastructure spending nationally…

Contact us at: Westlake Legal Group Your Northern Virginia Full Service Law Firm. Call (703) 406-7616 or click here for our website: https://westlakelegal.com/